Lessons from the best-managed firms. By Marc Rosenberg Author of “CPA Firm Management and Governance: The Managing Partner’s Guide to Running a CPA Firm Like a Business.” Baby boomer partners are rapidly approaching retirement age, resulting in a dramatic increase in new managing partners at firms. In fact, CPA Trendlines estimates that up to 25% of multi-owner firms are operating under managing partners who are relatively new to the job, with tenures under three years. And over the next five years, one-third of multi-owner firms will undergo a change in ownership and/or control.
First: Are your fees high enough? by Ed Mendlowitz, CPA Author of “Implementing Fee Increases” and “The Tax Season Opportunity Guide.” Increase your fees 3-5% at a minimum – to offset your increased costs. Deliver your bill with the return. Call clients before return is sent to explain and give a heads up for unexpected results.
How to slice the profits pie. Ever wonder about revamping the partner compensation system for your firm? But how to assess partner performance? And how to reward the right things? A firm’s compensation system is a reflection of its culture and competitive realities, according to August Aquila, a regular CPA Trendlines contributor and leading practice management consultant. More for CPA firm partner groups at CPA Trendlines PRO members [ Go PRO here ] : Seven Ways to Build the Right Culture | How to Change a Partner | How a Founding Partner Passes the Baton to a New Managing Partner | Six Reasons NOT to Plan for Succession | How to Apply Sam Walton’s 10 Rules for Success at Your [...]
Billing rates and partner incomes gaining strongly. Most CPA firms are reporting some measure of revenue growth, according to one widely followed survey obtained by CPA Trendlines. “And while the profession has yet to rebound to pre-recession levels,” the authors say, “it is steadily gaining momentum.” Furthermore, the smallest firms appear to be the biggest winners, with 33% growth in net client fees per professional and per partner. The report includes data and trends on: Increase in net fees Fees per partner Net remaining per partner Average partner billing rates Average partner compensation Utilization rates Paid time-off Firm technology Online technology
Business demand drives hiring, new competition for talent. Special to CPA Trendlines Fueled by new demand from business clients, CPA firms of all sizes are looking to expand audit and tax practices and pursue new new market segments, according to a fresh report on the accountant jobs market. (PRO members: Get the full report, courtesy CPA Trendlines.)
“Unintended,” maybe. But not altogether unforeseeable. With a new generation of CPAs taking over as managing partners comes a host of new questions and issues. Marc Rosenberg addresses some of the concerns in Compensation Issues for the New Managing Partner, which inspires Gary Zeune, Managing Director at The Pros & The Cons LLC, to weigh in on the kind of comp issues that he sees all too often as a fraud-fighter. Zeune comments: Don’t tell anyone but the problem with CPA firms is they’re run by accountants who don’t understand the unintended consequences of decisions.
Five factors to consider in their new compensation plan. And five key responsibilities for the new managing partner. by Marc Rosenberg, CPA Author of How to Operate a Compensation Committee Baby boomer partners are rapidly approaching retirement age, creating a huge demographic shift. One result of this is a dramatic increase in new managing partners at firms. Marc Rosenberg, CPA, is a nationally known consultant, author and speaker on CPA firm management, strategy and partner issues, and author of “How to Operate a Compensation Committee,” available here. Many firms are skipping a generation and turning the reins over to “younger” partners. Firms are also asking their new MPs to divest themselves of a significant part of their client base to [...]
Partners need to be something more than production machines. [Checklist included.]
…And what they’re NOT entitled to. Partners are entitled to a lot. At some firms, they are virtually royalty. But that’s no way to run a firm these days. Here, Marc Rosenberg, CPA, and author of How To Bring in New Partners and a CPA Trendlines affiliate, lists what every partner – especially new and wanna-be partners – need to understand. More from Marc Rosenberg: How to Make Partner? | Why Accounting Firm Partners Are “Popping Prozac like M&M’s” | The 15-Item Checklist for Your Next Partner Retreat | Five Key Responsibilities for a New Partner | Planning a Partner Retreat for Real Results | 6 Steps to Get Your Business to the Next Level | The 10 Biggest Mistakes in [...]
It’s a process. by Gary L. Adamson Adamson Advisory There is a constant topic of conversation both inside firms and at almost every conference. It is the age-old question of partner compensation and “how do you do it”. As our firm grew, we evolved from everyone is equal, to the “slip of paper” approach, to a more goal driven, performance based system. Every firm is a little bit different but the issues surrounding how you split the pie are pretty consistent.
Stuck at about $128,000 in total comp. Pay for finance and accounting executives is remaining essentially flat for the third year in a row, according to a survey by the Institute of Management Accountants of its members. The average salary increased 3.1% to $109,265 and total compensation increased 4.2% $128,486. But the IMA said “neither increase is statistically significant.” Unlike earlier years, total compensation in the latest year rose faster than base salaries. The IMA said more finance executives received raises this year, but the average amount of the raise has remained flat.
Companies increasingly tie pay to non-financial targets. Pay for CFOs is set to rebound this year after two years of declines, according to a new AICPA member survey. Predicting “a substantial improvement in 2011 at both private and public companies,” the AICPA survey says bonus-driven compensation should be buoyed this year by rapidly improving corporate performance.
Cash bonuses lead the way, up 24% Average compensation for chief financial officers at S&P 500 companies jumped 19% to $2.9 million last year, driven by rebounding profits and stock prices, according to a Wall Street Journal survey. While the median salary was little changed from a year earlier at $543,500, stock awards and bonuses rose sharply and accounted for most of the comp package. Median compensation for finance chiefs is running at about about one-third the median pay for CEOs at the same companies. CEO compensation rose 24% from a year earlier, after falling 5% in 2009 from 2008. CFO compensation increased slightly in 2009 from a year earlier. But last year, the median value of option awards to [...]
How the best firms grow in tough times. by David Bergstein CPA, CITP Director of Strategic Relationships, CCH CCH Intelligent Solutions blog The best firms are rewarding staff — all staff — for bringing in new clients and new revenue, rewarding them for obtaining new business as part of their compensation plan. This is a good thing because it gets them on track to be “Rainmakers.” Firms are trying to keep staff and incent them at the same time. Firms that have put together programs and compensation to reward staff for bringing in new clients are the ones that are growing. Some staff are excellent technicians and will get paid accordingly, and others that drive new business and cross-sell niche [...]